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How Do Car Salesman Get Paid

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Is Being A Car Salesman A Good Job And How Do They Get Paid

Car Salesman Reveals How Dealership Employees Get Paid and Why It Matters To Customers

A lot of people have a pretty low opinion of car salesmen and saleswomen because they think theyre only there to try and earn as much commission out of you as they possibly can. In some cases that can definitely be true, but have you ever stopped to wonder if being a car sales exec is a good job or how they actually earn their money?

I was in the retail auto business for almost a decade before getting out of that side of things and into automotive writing and journalism, so let me tell you the truth about what its like to sell cars for a living and how you earn your money in that job.

How To Become A Car Salesperson

Car sales representatives are an important component of the automotive industry and can help individuals make an ideal decision when choosing what type of vehicle to invest in. They also play an imperative role in the overall profitability of a car dealership. While this career requires a number of qualifications and takes tremendous dedication, it can be a fulfilling job for many.

In this article, we will explore what a car salesperson does, the average salary of car sales representatives and the steps you can take to pursue this career path.

Using This Information To Get A Better Car Deal

While understanding the process of how car salespeople make money seems like it would only matter to them, knowing about this information can actually help you when you step on the lot to purchase your vehicle. It’s just a matter of understanding the right way to go about it. Here are some tips to consider:

· Shop at multiple dealerships. The same vehicle can have a different price depending on what lot you visit. Since a salesperson doesn’t get paid unless they sell you the car, they’ll want to give you the best possible deal so that you choose them. Don’t be afraid to mention the offers you’ve gotten at other places.

· Pick the right timing. Individual quota deadlines for salespeople usually fall at the end of the month, and dealerships may also be trying to meet a quota for a manufacturer bonus at the end of the quarter or year, such as selling a certain number of Ram trucks or GMC cars.. Shopping close to this time can make it more likely to get a better price so that the salesperson can meet their quotas.

· Don’t talk about financing until necessary. It’s a smart strategy to have a pre-approved loan before you go in to shop, but you don’t need to bring it up right away. A dealer will make a profit if they get you to take their financing, and you may be able to get a better price on the vehicle if they think they can make up the money with a loan.

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Spiff And Other Benefit

Spiffs are bonuses availed to salespeople for selling a particular car of a particular model. Mostly, these are cars that have been in the dealership for a long time. A salesman can make $50 to $500 in spiffs for every car they sell.

When a car buyer purchases other services such as insurance and financing, the salesman will earn a back-end commission which is usually 5% of the profit.

In some cases, especially for new car deal, salesmen might sell a car at a breakthrough price. This means that no profit is realized from the sale. The dealer might give the salesman a mini commission. This is a minimum commission and may range from $75 to $200.

When times are hard, and the salesperson may find it difficult to get through. In such a scenario, he might want to request a draw against the commission. This is offered at minimum wage and is usually deducted from the commission earned for the month.

Let me now put all the above factors into perspective.

Jeremy Clarkson, a highest paid car salesman working at Top Grand Motors sold 15 cars in July. The dealership had placed spiffs on two cars, at $100 per car. Each car earned the dealership $2000 in profit. The dealership pack policy is set at $800.

A client financed his car through the dealership earning an extra $1500 profit. All back-end commissions are earned at 5% of the profit at Top Grand.Since sales were low the previous month, Jeremy Clarkson had taken a draw against the commission of $2000.

Number Of Cars Sold/Leased

Do You Need To Be A Car Fanatic To Be A Car Salesman

Do Car Salesmen Get Paid Hourly?

Its certainly a good starting point for embarking on a career in the retail auto sales business if you have a love of all things automotive, but its certainly not a prerequisite for getting a job as a car salesman. Some of the most successful and best-paid sales execs Ive ever come across didnt have much interest in cars at all, but they were the exception rather than the rule.

At the other end of the interest spectrum, if youre a committed gear head and you know absolutely everything about the workings of the internal combustion engine you may not make a great salesman at all. Most buyers are not particularly technically minded and theyre more concerned about what the car and its features can do for them, rather than how things work.

By the way, if youd like to know about some of the very best products, services and companies Ive found for buying, selling, and helping with vehicle ownership then please check out my recommended products and services page right here. As well as telling you where to go to get the very lowest prices on new and used vehicles, I also cover finance, insurance, parts, detailing and other stuff too.

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Is Selling Cars A Good Career Program

Many people see a career in car sales as a job with long hours and the need to use difficult closing methods. However, a career in car sales can be very rewarding. Successful car salespeople know that their success is independent of the brand of car they sell.

Is it a good career choice to be a car salesman?

If not, a career in the auto trade can be a viable option. The auto industry, like most jobs, will take little time to adapt. You have to learn the auto industry and its methods to become a top auto salesman. By learning the trade you can earn a lot of money, it only takes a few months.

Above Average Car Salesmans Pay

$60,000 $120,000+ a year These are your very seasoned professional car salesmen, highly trained, and take car sales very seriously. These individuals have normally been at one dealership for a very long time. They have built a steady flow of repeat and referral business over time, sell-by appointment, and dont rely on walk-in traffic.

There are very few individual car salesmen in this pay range. They are very organized, stay in touch with their customers and work smart not hard.

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How Many Cars On Average Does Car Salesman Sell Per

The average number of cars the dealership sells per month, if the staff is sufficient for traffic, should be between 30 and 36 cars per month for a good/sales leader.

How many cars on average does car salesman sell in los angeles

The city of Los Angeles is 503 square miles and 45 million miles of travel every day through Los Angeles.

Is Car Sales A Good Career

How a CAR SALESMAN gets PAID Part 1 – CAR DEALERSHIPS – Auto FINANCE: The Homework Guy, Kevin Hunter

Taking car sales as a career may not be a good fit for you if all you need is a fixed amount of salary. There is no such thing as a car salesman. But, you have a lot to benefit from if you take car sales as a career.

Get the gist in this, car sales career would not only give you an edge in your interpersonal skill, it helps you even when you no more work in the dealership.

The experience in a car sales career can still make you money if you choose to become a consultant.

Yes, this may sound like a joke but this is what you enjoy in a career like car sales meeting famous and handymen and women and also helping them learn about the car they would love to buy.

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How To Be A Car Salesman

Dont get pumped with the commission rate and good money car salespersons are making. Being a successful car salesperson is no easy task. Car salespeople must deal with customers with a wide variety of needs and wants with regards to their new purchases. Because of this, there isnt any easy way to tell what it is you need to do to become one the aspiring car salesmen. Heres how to be a good car salesman.

Average Car Salesman Commission

Calculating the commission earned by a car salesperson can get complicated at times. This is due to the numerous factors contributing to the total commission. Let us delve into the intricacies that characterize car salesmens commission.

When the salesman sells a car, he earns a commission based on the profit his employer made. Profit is calculated as:

Gross Profit = Selling Price Cost Of Car

Before calculating the commission, you have to factor in the pack fee. This is a fee set aside to ensure the dealership gets paid despite what price the salesman sells the car at.

If a salesman sells a car and realizes a profit of $2500, set pack fee is $800, and commission is 25%, the commission will be as follows:

= $1700*25% = $425

Car salesmens commission ranges from 20% to 35%. Some employers offer what is referred to as the sliding scale commission. This simply means that you get more commission when you sell or lease more cars. In most dealers, the scale as follows:

Number Of Cars Sold/Leased

At 20% commission per car, for cars averaging $1500 in profit, the commission will be:

$1500*20% = $300 per car.

For 8 cars in a month, the commission will be $300*8 = $2400.

Commission is also taxable. So, if you get fixed salary plus commission both, dont forget to sum the commission with fixed pay before deducting taxes to get Net salary.

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Average Car Salesman Net Salary

Every individual with an income is eligible to pay taxes. Tax varies depending on the salary level and the start. The federal tax applies to all individuals. It ranges between 10% and 37%. A sales person earning an average of $3349 falls in the 22% bracket.

State income tax is levied on your income by your state. For example, in the state of Louisiana, you will incur a 4% state income tax. Other deductions are social security and Medicare.

For a good car salesperson earning a gross salary of $3349, the net pay will be:


Here, Net salary = Gross salary Tax and Deductions = $3349 $650.17 = $2698.83

This calculation is just a sample breakdown. If you wish to know how much you will take home at the end of the month or year, you need to calculate using your salary and state income tax percentages. Use the online calculator for determining what does a car salesman make.

The federal tax also changes depending on whether you are filing as an individual of a married couple. The sample above applies to unmarried people.

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Job Profile Of A Car Salesman

How Car Salesman Get Paid

For a car salesman, commission is the main thing over a fixed salary. Your job is to sell as many cars as possible and take home a percentage of the gross profits. Salesmen are given a sales quota of between 8-to-12 units a month unless theyre working at a dealership of a high-end brands like Jaguar, Land Rover or Lexus. If you exceed the number of car sales set in your quota then you can expect higher commission and a bonus as well. However, if youre selling less cars than your set quote, you may have to face the heat of losing your job. Some car dealerships even offer bonuses for pushing hard-to-sell cars. Car salespeople frequently work long hours, and the highest performers can earn over $100,000 per year.

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Do Car Salesman Get Paid Off Of Commission

Most traditional car dealers only pay a commission to their sellers. That is, if they don’t sell the car, they won’t pay them. With some peas it can take several days between car sales and payment.

What is the average commission rate for car sales?

The car dealer’s commission depends on the department. Most car sellers receive a commission of 25% of their gross profit minus a small commission. These costs are usually several hundred dollars. In general, the typical salary for a car salesman is between $250 and $300 per car.

Do Car Salesmen Make 100k

Most salespeople make between 80 and 90 percent of their sales off vehicles they have closed. These jobs base salaries are about $60k per year. With commissions, they may earn up to $100k or more per year. The average monthly sales for a franchised U.S. car dealership would range from 15 to 18 cars.

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The Average Salary Of A Car Salesman


If you’re outgoing, relationship-oriented and possess the gift of gab, you might consider a career as a car salesperson. These individuals know a lot about the vehicles they’re selling and have the type of persuasive selling skills that can overcome resistance and turn a “maybe” into a “yes.” Most car salespeople work for a dealership, and their base salary may be fairly paltry as most of their income comes from commissions based on the dealership’s gross profit on the car. So, the more cars you sell, the more money you earn.

How Do Car Dealers Make Money

COMMISSIONS – How a CAR SALESMAN gets PAID Part 2 – CAR DEALERSHIPS – The Homework Guy, Kevin Hunter

Generally, youll take a cut of the profit your dealership makes. If youre the only salesperson, youre earning money based on the sales you personally make. But as your dealership grows, your salary can grow right along with it.

As the dealership owner, you get the structure the way you pay any salespeople. Generally, youll pay a base salary and offer a commission on car sales, plus some bonuses. As youre structuring pay for any employees, make sure you leave some wiggle room so you can earn a salary yourself.

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Average Car Salesmans Pay

$35,000 $60,000 a year Salesmen that fall into this pay range usually have retail car sales experience and some natural sales skills. In my opinion, there are three things that these salespeople all have in common, the gift-of-gab, people-person, and they can absolutely handle objections.

These individuals are usually selling a car or doing something to sell a car while at the dealership with very little downtime. They set appointments, and follow up with their customers they still rely on walk-in traffic, but not as the first choice of traffic. They have set techniques they use consistently when talking with customers and rely on their Manager to help close their deals when they have problems.

How Do I Gross My Car To Sell

So if you want to raise gross, ask for bigger down payments. 2. Sell More CPO: Certified pre-owned cars have higher gross appeal than new or used. Train your salespeople to fully explain the benefits of CPO units, and make sure to certify a large number of units and isolate them from the rest of your inventory.

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What Is A Car Sales Draw Or Draw Check

A draw check is normally minimum wage at a 40-hour workweek no matter how long or hard a salesman worked for the week. To entice a car salesman to apply with a dealership they may up the draw to $2,000 or more.

Previous sales commission a car salesman earns from the month before are normally paid around the 15th of the month. The total commission, bonuses and spiff money is calculated and then the draw amount is deducted from that amount. Taxes and any deductions are then deducted from the balance.

If a car salesman earns a total of $2,800 for the month and the draw was $1,500. The salesmans settle up commission check, before taxes, would be $1,300.

If the car salesman earns under the draw amount in total commissions, they will not receive a commission check. This will put a car salesman in the hole or in the bucket with the dealership.

Lets say the salesman only made $1,200 in total sales and commission he would start the next sales month in the hole with a $300 draw on the books. This salesman will have to make a minimum of $1,800 before making a commission check and getting out of the hole.

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